Accounting firm that helped clients evade $1.3 billion in taxes agrees to pay 25% of its fees from

such services (or $50 million out of $200 million in fees) in order to enter into a deferred prosecution agreement and settle the IRS' claims against it.

Michael Rapoport of the WSJ:

BDO, the U.S. arm of BDO International, the world's fifth-largest accounting firm, entered a deferred-prosecution agreement with federal prosecutors in New York in connection with a criminal charge of tax-fraud conspiracy. The firm admitted responsibility for criminal conduct. The charge will be dismissed if the firm complies with the conditions of the agreement, including permanent restrictions on its tax practice, implementation of a compliance and ethics program and continued cooperation with the government's investigation.

The U.S. Attorney's Office in Manhattan said BDO developed and sold illegal tax shelters, known as "Short Sale" and "SOS," to wealthy clients that generated at least $6.5 billion in phony tax losses from 1997 to 2003. BDO said it received about $200 million in fees from those transactions.

The firm falsely characterized the shelters as investments, used false and fraudulent correspondence and other documents to mask the products and associated fees, filed false tax returns and provided false information and documents to the Internal Revenue Service, prosecutors said.